Supervisors well placed for new anti-money laundering regime

Release date

20 June 2013

New Zealand's new Anti-Money
Laundering (AML) regulatory regime, taking effect from 30 June, will help to
take the profit out of crime, reduce the chances of New Zealand being involved
in terrorism financing and enhance New Zealand's reputation on the global
stage, Reserve Bank Anti-Money Laundering manager Rob Edwards said today.

In a
speech to an Anti-Money Laundering and Countering Financing of Terrorism
seminar in Wellington, Mr Edwards said there were two key reasons the new AML
regime is important.

"First, our AML regime is part of a co-ordinated
international effort to tackle two worldwide problems: criminal activity that is
made more attractive when the proceeds are able to be laundered, and the funding
of terrorist attacks.

"The second purpose of the Anti-Money Laundering and Countering
Financing of Terrorism Act 2009 is to maintain and enhance New Zealand's
international reputation for a sound and high-integrity business
environment."

The Reserve Bank, the Department of Internal Affairs and the Financial
Markets Authority are tasked with supervising entities under the Act and are
well placed to begin their new role, Mr Edwards said. The purpose of this
supervision is to check that firms have the systems in place to comply with
their AML obligations, including detecting and reporting suspicious
activity.

While the new regime beds in, the emphasis will be on the monitoring of
compliance with the Act.

"We expect that our monitoring activity will alert us to any breaches
that will be investigated and potentially result in enforcement actions.

"Supervision is a two-way street; willing and enthusiastic
participation by industry will make the process more efficient and make the
regime more effective," Mr Edwards said.

Money laundering is how criminals disguise the illegal origins of their
money. Financers of terrorism use similar techniques to money launderers to
avoid detection by authorities and to protect the identity of those providing
and receiving the funds.

The Department
of Internal Affairs supervises casinos, non-deposit taking lenders, money
changers, and any other financial institutions not supervised by The Reserve
Bank or The Financial Markets Authority.

Examples of financial activities regulated under the AML/CFT Act include (but
are not limited to):

accepting deposits or other repayable funds from the public

making a loan to or for a customer

issuing a debit or credit card

managing the means of payment

supplying goods through a finance lease (other than for consumer products)

providing remittance services which transfer money or property

issuing or accepting liability under life insurance policies

issuing or selling securities and derivatives

safekeeping or administering cash or liquid securities on behalf of other
persons

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